CLOROX QUARTERLY AD SPENDING UP, PROFITS DOWN

Success of ReadyMop Offset by Economic Turmoil in Latin America

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CINCINNATI (AdAge.com) -- Clorox Co.'s profits took a hit for its fiscal third quarter, down 46%, even as sales and ad spending were up sharply.

The Oakland, Calif.-based consumer products maker today reported net income of $46 million, or 20 cents a share, compared with $79 million, or 33 cents, for the same period a year ago.

Ad spending rose

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17% to $105 million as sales climbed 7% to $1.03 billion, led by 14% growth in the core North American household products business, which was fueled by the launch of the Clorox ReadyMop bucketless floor cleaner.

Clorox said other products, such as Glad bags, Armor All protective wipes and Clorox 2 laundry additives, also saw sales and ad hikes, but currency losses and economic turmoil in Argentina, combined with a relatively low margin on ReadyMop, hurt profits.

The company plans to cut its Latin American workforce 6%, or by 150.

Chairman-CEO Craig Sullivan said research shows consumers still prefer ReadyMop to rival Procter & Gamble Co.'s Swiffer WetJet even as Swiffer has cut prices in half to reach parity at $25.

While ReadyMop margins are lower than the company average, the long-term payoff is in sales of replacement pads and cleaning fluid.

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